About Us
People for Pensions
We’re passionate about pensions and believe strongly in the value of the defined benefit pension model and its ability to provide secure, predictable income in retirement.
That’s why we created People for Pensions, a program to spread the word about the value of defined benefit pensions from the pension people that matter: our membership.
People for Pensions is an information program from OPTrust, the administrator of the OPSEU Pension Plan (including OPTrust Select). Our mission: Paying pensions today, preserving pensions for tomorrow.
What’s a defined benefit pension?
A defined benefit – or DB – pension plan seeks to ensure that a retiree will receive secure, predictable income in retirement.
The main feature of a DB pension is that it's calculated based on a formula. Members know how much pension income they will receive each month for as long as they live. That way they can plan for their retirement.
Unlike retirement savings in individual accounts that can be directly impacted by ups and downs in the stock market, DB plans use a set formula to calculate each member’s pension.
What is a defined benefit pension?
Understanding your sources of retirement income
There are three main sources of retirement income that Canadians may rely on for security in retirement. We encourage you to explore the key eligibility requirements for each source to learn more.
The defined benefit pension gap
1. Government programs
Most people who work for an employer in Canada contribute to either the Canada Pension Plan (CPP) or the Quebec Pension Plan (QPP). Contributions are based on income, and employers pay half the required contributions. The retirement age to collect CPP/QPP is 65, although you can choose to receive a reduced pension as early as age 60. Or, if you choose to wait until after age 65 to collect your CPP/QPP, your CPP pension payments will be higher.
Many DB pension plans are integrated with CPP/QPP. This means members make lower contributions to their DB plan up to the annual CPP/QPP limits and the pension they receive at age 65 is reduced to reflect the fact that members are entitled to receive unreduced CPP/QPP benefits at that age. If they retire before age 65, they will notice the pension amount they receive from their DB plan after age 65 is lower than before age 65. That is because at age 65 they are eligible to start the CPP/QPP pension on an unreduced basis.
Most people who work for an employer in Canada contribute to either the Canada Pension Plan (CPP) or the Quebec Pension Plan (QPP). Contributions are based on income, and employers pay half the required contributions. The retirement age to collect CPP/QPP is 65, although you can choose to receive a reduced pension as early as age 60. Or, if you choose to wait until after age 65 to collect your CPP/QPP, your CPP pension payments will be higher.
Many DB pension plans are integrated with CPP/QPP. This means members make lower contributions to their DB plan up to the annual CPP/QPP limits and the pension they receive at age 65 is reduced to reflect the fact that members are entitled to receive unreduced CPP/QPP benefits at that age. If they retire before age 65, they will notice the pension amount they receive from their DB plan after age 65 is lower than before age 65. That is because at age 65 they are eligible to start the CPP/QPP pension on an unreduced basis.
The Old Age Security benefit, or OAS, is a monthly pension you can receive if you're age 65 or older. The amount someone receives will depend on how long they lived in Canada or other specific countries after the age of 18. OAS payments are taxable. It is not based on employment history.
OAS pensions are income-tested. This means that once an individual’s retirement earnings pass a certain income threshold, they may be required to pay back all, or part, of their OAS pension.
The Old Age Security benefit, or OAS, is a monthly pension you can receive if you're age 65 or older. The amount someone receives will depend on how long they lived in Canada or other specific countries after the age of 18. OAS payments are taxable. It is not based on employment history.
OAS pensions are income-tested. This means that once an individual’s retirement earnings pass a certain income threshold, they may be required to pay back all, or part, of their OAS pension.
The Guaranteed Income Supplement, or GIS, is a supplement to the Old Age Security benefit that low-income seniors may qualify to receive. People who qualify must have incomes below specified levels. GIS income is not taxable.
The Guaranteed Income Supplement, or GIS, is a supplement to the Old Age Security benefit that low-income seniors may qualify to receive. People who qualify must have incomes below specified levels. GIS income is not taxable.
2. Employer-sponsored pension plans
A defined benefit, or DB, pension plan seeks to ensure that a retiree will receive secure, predictable income in retirement.
The main feature of a DB pension is that it's calculated based on a formula. Members know how much pension income they will receive each month for as long as they live. That way they can plan for their retirement.
With a DB pension, members don't have to worry that they will outlive their pensions. Some DB pension plans also include annual inflation adjustments. Unlike retirement savings in individual accounts that can be directly impacted by ups and downs in the stock market, DB plans use a set formula to calculate pensions.
DB plans are managed by investment professionals and the management fees are typically less expensive than most other models. A DB model pools the contributions from thousands of people, meaning the costs and risk are shared.
A defined benefit, or DB, pension plan seeks to ensure that a retiree will receive secure, predictable income in retirement.
The main feature of a DB pension is that it's calculated based on a formula. Members know how much pension income they will receive each month for as long as they live. That way they can plan for their retirement.
With a DB pension, members don't have to worry that they will outlive their pensions. Some DB pension plans also include annual inflation adjustments. Unlike retirement savings in individual accounts that can be directly impacted by ups and downs in the stock market, DB plans use a set formula to calculate pensions.
DB plans are managed by investment professionals and the management fees are typically less expensive than most other models. A DB model pools the contributions from thousands of people, meaning the costs and risk are shared.
In a defined contribution, or DC, pension plan, employees and employers typically both contribute to the employee's individual account within the pension plan. Members are usually then responsible for their own investment decisions and building their retirement “nest egg.”
The main differences between DB and DC plans are:
Members of DC plans must guess how long they will live to help ensure their savings last – or purchase an annuity from a life insurance company, which can be very expensive. In a DB plan, on the other hand, benefits are guaranteed for life.
In a DC plan, the member assumes the investment risk. Market fluctuations can have a bigger impact on retirement income in a DC plan than a DB plan and therefore DC plans don't offer the same level of income predictability. A DB plan, on the other hand, bases benefits on a formula so individual members' benefits are not impacted by changes in the market.
Under a DC pension model, fees can be passed on to plan members, which can have a significant financial impact on members' account balances.
In most cases, the intention of DC plans is to help an employee save for retirement, rather than providing income in retirement.
Note: In addition to employer-sponsored pension plans, many employers may offer other types of Capital Accumulation Plans (CAPs) including Group Registered Retirement Savings Plans and Group Tax Free Savings Accounts. In general, CAPs have features like those outlined above for DC plans, which also fall into the CAP category.
In a defined contribution, or DC, pension plan, employees and employers typically both contribute to the employee's individual account within the pension plan. Members are usually then responsible for their own investment decisions and building their retirement “nest egg.”
The main differences between DB and DC plans are:
Members of DC plans must guess how long they will live to help ensure their savings last – or purchase an annuity from a life insurance company, which can be very expensive. In a DB plan, on the other hand, benefits are guaranteed for life.
In a DC plan, the member assumes the investment risk. Market fluctuations can have a bigger impact on retirement income in a DC plan than a DB plan and therefore DC plans don't offer the same level of income predictability. A DB plan, on the other hand, bases benefits on a formula so individual members' benefits are not impacted by changes in the market.
Under a DC pension model, fees can be passed on to plan members, which can have a significant financial impact on members' account balances.
In most cases, the intention of DC plans is to help an employee save for retirement, rather than providing income in retirement.
Note: In addition to employer-sponsored pension plans, many employers may offer other types of Capital Accumulation Plans (CAPs) including Group Registered Retirement Savings Plans and Group Tax Free Savings Accounts. In general, CAPs have features like those outlined above for DC plans, which also fall into the CAP category.
3. Personal Savings
The federal government established Registered Retirement Savings Plans, or RRSPs, to encourage Canadians to put aside personal savings for their future retirement.
The main incentive to set up an RRSP account is that contributions are tax deductible. Canadians don't pay taxes on their RRSPs until the money is withdrawn.
If you are a member of a registered pension plan (DB or DC) this will reduce the amount you can contribute to an RRSP. The reason for this is that the Canada Revenue Agency (CRA) imposes limits on the amount of money that Canadians can save for retirement on a tax-deferred basis. All Canadians, whether they belong to a pension plan or save for retirement through an RRSP, are subject to the same limits.
The federal government established Registered Retirement Savings Plans, or RRSPs, to encourage Canadians to put aside personal savings for their future retirement.
The main incentive to set up an RRSP account is that contributions are tax deductible. Canadians don't pay taxes on their RRSPs until the money is withdrawn.
If you are a member of a registered pension plan (DB or DC) this will reduce the amount you can contribute to an RRSP. The reason for this is that the Canada Revenue Agency (CRA) imposes limits on the amount of money that Canadians can save for retirement on a tax-deferred basis. All Canadians, whether they belong to a pension plan or save for retirement through an RRSP, are subject to the same limits.
While not specifically designed for retirement, Tax-Free Savings Accounts, or TFSAs, were introduced in 2009 to help Canadians save money tax free.
Contributions to TFSAs are not deductible for income tax purposes and savings/eligible investments made within a TFSA can grow tax free.
You can withdraw money from a TFSA at any time and withdrawals are tax free.
TFSAs are commonly used to save for short-term goals or after someone has maximized their RRSP contributions.
TFSAs can also be used as a vehicle in retirement to deposit surplus income from a pension plan or a retirement income fund.
An annual contribution limit for the TFSA is set each year and unused room is carried forward. Further, if someone withdraws from their TFSA, the amount will be added back into their contribution room the following year.
While not specifically designed for retirement, Tax-Free Savings Accounts, or TFSAs, were introduced in 2009 to help Canadians save money tax free.
Contributions to TFSAs are not deductible for income tax purposes and savings/eligible investments made within a TFSA can grow tax free.
You can withdraw money from a TFSA at any time and withdrawals are tax free.
TFSAs are commonly used to save for short-term goals or after someone has maximized their RRSP contributions.
TFSAs can also be used as a vehicle in retirement to deposit surplus income from a pension plan or a retirement income fund.
An annual contribution limit for the TFSA is set each year and unused room is carried forward. Further, if someone withdraws from their TFSA, the amount will be added back into their contribution room the following year.
Did you know?
of respondents said they spend time at work thinking about personal financial matters, according to a 2020 Canadian Payroll Association survey.
Canadians would accept a slightly lower salary in exchange for a better (or any) pension, according to the 2020 HOOPP/Abacus Canadian Retirement Survey.
The benefits of the Canadian pension model
How pensions benefit your community and the economy
Meet our members
Teresa Guillem
Vicki Robbins
David Ferguson
Becky Wang
Teresa Guillem
Vicki Robbins
David Ferguson
Becky Wang
People for Pensions FAQ
People for Pensions is a voluntary education program for people who want to learn more about the positive aspects of defined benefit pension plans and share that information with their friends and family. We invite anyone interested in learning more or sharing information on the value of a DB plan to become a People for Pensions member.
As a People for Pensions member, you can spread the word to your colleagues, friends and family about the value of DB plans – not only for members and retirees, but also the wider benefit of how secure pensions contribute to a strong economy and reduce poverty among Canadian seniors.
People for Pensions is also a key resource for you to learn more about defined benefit plans. When you sign up, you will receive bi-monthly newsletters from us with interesting facts and interactive content.
As a People for Pensions member, you can spread the word to your colleagues, friends and family about the value of DB plans – not only for members and retirees, but also the wider benefit of how secure pensions contribute to a strong economy and reduce poverty among Canadian seniors.
People for Pensions is also a key resource for you to learn more about defined benefit plans. When you sign up, you will receive bi-monthly newsletters from us with interesting facts and interactive content.
Anyone who is interested in learning more, and/or sharing information about the value of a DB plan can be a People for Pensions member.
Anyone who is interested in learning more, and/or sharing information about the value of a DB plan can be a People for Pensions member.
No! Being a People for Pensions member means you're interested in learning more about how defined benefit plans are a value to members, retirees and society. Members of the program are not expected to be experts on the specifics of pension plans.
No! Being a People for Pensions member means you're interested in learning more about how defined benefit plans are a value to members, retirees and society. Members of the program are not expected to be experts on the specifics of pension plans.
Some members of the program will feel comfortable explaining the value they see in their workplace pension plan, such as how the plan offers secure, predictable income in retirement that is an important part of a larger retirement savings plan. If you get stumped by a question, you can always tell people to check out this website for more information.
For detailed questions like how to qualify for benefits or how pensions and contributions are calculated, direct people to the experts: members should always be directed to the OPTrust or OPTrust Select websites as applicable.
If you have more questions, you can email our Community Lead.
Some members of the program will feel comfortable explaining the value they see in their workplace pension plan, such as how the plan offers secure, predictable income in retirement that is an important part of a larger retirement savings plan. If you get stumped by a question, you can always tell people to check out this website for more information.
For detailed questions like how to qualify for benefits or how pensions and contributions are calculated, direct people to the experts: members should always be directed to the OPTrust or OPTrust Select websites as applicable.
If you have more questions, you can email our Community Lead.
The People for Pensions program is intended to raise awareness about the value of defined benefit pension plans.
The People for Pensions program provides information for those passionate about retirement security to share information with their peers, friends and families about the value of DB plans and how the DB model supports the economy.
The People for Pensions program is intended to raise awareness about the value of defined benefit pension plans.
The People for Pensions program provides information for those passionate about retirement security to share information with their peers, friends and families about the value of DB plans and how the DB model supports the economy.
You can sign up today or ask us a question. Our Community Lead will get back to you as soon as possible.
You can sign up today or ask us a question. Our Community Lead will get back to you as soon as possible.
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